Making a personal loan can lead to some awkward situations. Particularly if you are loaning money to a close friend or family member, it is important to have a workable payment schedule in place to avoid creating unnecessary confusion or tension about the terms of the loan.
Using an amortization calculator can help ensure that the lender and borrower are on the same page by creating a straightforward payment schedule that accounts for interest and principal payments. With professional-grade software, lenders can easily determine interest rates, installment amounts and payment and compounding frequencies. In turn, this makes it simple to create a consistent schedule that the borrower will be able to follow.
With an amortization calculator, it is easy and fast to view a breakdown of what amounts are due on what dates, as well as the remaining principal balance. Users can generate, print and save amortization schedules for all types of loans and payment schedules.
Having access to amortization schedules on demand allows lenders and borrowers to quickly check what the projected balance of the loan will be on a particular future date, or the amount of interest that will be paid in a given year. Using an amortization calculator also helps parties understand how changes to the terms of the loan, such as adjusting the interest rate, the amount borrowed, or the lifespan of the loan will affect payment amounts.
When you use an ad-hoc spreadsheet solution, it is difficult to guarantee the accuracy of the payment schedule you are creating. Furthermore, making changes is difficult and time-consuming. With software that is specifically designed for creating amortization schedules, problems can be minimized, allowing you to make a personal loan with confidence that it will be repaid in a timely manner.